credit card problem

How to deal with balance transfer credit card problems

If you’ve ever made a mistake or had an issue with a balance transfer, read this to learn the easiest way to deal with it.

Balance transfers can be a great way to consolidate and pay down your existing credit card debt. You could save hundreds or thousands of dollars in interest charges by taking advantage of the lower promotional interest rate. Balance transfers aren’t entirely risk free, so there are a few traps that you’ll need to aware of.

The most common mistakes that are made with balance transfers can happen at any time throughout the process, whether it is when you’re first applying or when you’re paying off the last of the balance. We’ve identified some of them and strategies you can use to turn yourself around.

Problem: Applying for a card with the same issuer

Balance transfer offers come with a wide range of terms and conditions, so you’ll need to meet some eligibility requirements to receive approval.

In the fine print

Tucked away in all the fine print is a clause that says something along the lines of this: “offer is not available for balances transferred from existing credit card accounts with this issuer”. Basically, you have to be a new customer to approve your balance transfer at the promotional interest rate. For example, a Westpac customer could not get a Westpac balance transfer credit card.

Underwriting issuers

The other factor to remember when applying for a balance transfer credit card is that some companies offer cards that are actually underwritten by other financial institutions. Citi, for example, is the credit provider for Virgin Money, and as a result, existing Citi customers aren’t eligible for balance transfer offers to Virgin Money cards, and vice versa.

The tricky part is that if you do apply for a new credit card with the same issuer, you could be approved for the card – and even the balance transfer in some cases – but not the introductory rates. So there’s potential to end up with more credit cards and no lower interest rate.

The best way to avoid this is to check which banks you can transfer between before applying.

What to do about it

If you accidentally apply for a balance transfer with your existing card issuer, the outcome and solution will depend on which stage of the application you’ve realised the issue. Some of the potential scenarios and strategies include:

  • During the application process.
    If you have just applied for the new credit card, or have just received conditional approval but have NOT submitted supporting documentation, call up the credit card company and cancel the application. Let them know that your existing debt is with the same issuer, and that you have just realised this means you won’t be eligible for the balance transfer offer.
  • If the card application has been approved.
    If your credit card and balance transfer was approved, call up the new credit card company and tell them your concerns. Sometimes applications are processed quickly and they won’t identify the problem until they try to transfer the balance. In other cases, you may get approved for the card but not the balance transfer. Calling up to talk to someone stops the problem from getting more complicated, and protects you from any unnecessary charges.
  • If the card application has been declined.
    This is most probably because it's issued by the same provider. You can still apply for a different balance transfer card, but just remember that all your applications will be listed on your credit file, and applying for too many in a short amount of time could reduce your credit score.
  • If you actually want to transfer a balance to a card with your existing issuer.
    Some credit card issuers offer balance transfers specifically for existing customers, which gives you a legitimate option if you want to stay with your issuer but choose a different card. Contact them directly to see what’s possible for your circumstances.

Compare balance transfer credit cards

Rates last updated July 22nd, 2018
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Name Product Balance transfer rate (p.a.) Purchase rate (p.a.) Annual fee Amount Saved Product Description
Westpac Low Rate Card
0% p.a. for 24 months with 1% balance transfer fee
13.49% p.a.
$0 p.a. annual fee for the first year ($59 p.a. thereafter)
Offers a 0% for 24 month balance transfer option, first year annual fee waiver and a competitive purchase rate.
Citi Clear Platinum - Exclusive Offer
0% p.a. for 24 months with 1.5% balance transfer fee
14.99% p.a.
$49 p.a. annual fee for the first year ($99 p.a. thereafter)
finder Exclusive: Receive 0% p.a. for 24 months on balance transfers and a discounted annual fee in the first year. Plus, access to Citi World Privileges.
NAB Low Fee Platinum Card - Exclusive Amazon Offer
0% p.a. for 24 months with 2% balance transfer fee
19.74% p.a.
$90 p.a.
finder Exclusive: 10% cashback with amazon.com.au for 12 months (capped at $25 per month). Plus, 0% p.a. on balance transfers for 24 months.
HSBC Platinum Credit Card
0% p.a. for 22 months with 2% balance transfer fee
19.99% p.a.
$0 p.a. annual fee for the first year ($129 p.a. thereafter)
Offers a 0% p.a. for 22 months balance transfer, $0 annual fee for the first year and an annual fee refund each year when you spend $6,000.
St.George Vertigo Platinum - Online Offer
0% p.a. for 24 months with 1% balance transfer fee
12.74% p.a.
$0 p.a. annual fee for the first year ($99 p.a. thereafter)
Platinum card benefits including complimentary insurance, plus first year annual fee waiver and 0% p.a. for 24 months on balance transfers.
Virgin Australia Velocity Flyer Card - Bonus Points Offer
0% p.a. for 18 months
20.74% p.a.
$64 p.a. annual fee for the first year ($129 p.a. thereafter)
Earn up to 60,000 bonus Velocity Points in the first 3 months and enjoy a discounted annual fee of $64 for the first year.
HSBC Low Rate Credit Card
0% p.a. for 20 months with 2% balance transfer fee
13.25% p.a.
$79 p.a.
Receive up to 20 months interest-free on balance transfers with a 2% BT fee. Also enjoy exclusive offers with the home&Away Privilege Program.
Citi Simplicity Card
0% p.a. for 15 months with 1.5% balance transfer fee
19.99% p.a.
$0 p.a.
Save with 5% cashback on eligible purchases (capped at $50 per month) for the first 90 days from approval. Plus, a 15 month balance transfer offer.
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
0% p.a. for 18 months
20.74% p.a.
$64 p.a. annual fee for the first year ($129 p.a. thereafter)
Take advantage of 0% p.a. on balance transfers for up to 18 months. $64 in the first year ($129 p.a. thereafter), plus, bonus Velocity Points.
NAB Low Fee Card
0% p.a. for 18 months with 2% balance transfer fee
19.74% p.a.
$30 p.a.
Receive complimentary purchase protection insurance, a 18 month balance transfer offer and special offers from Visa Entertainment.
Virgin Money Low Rate Credit Card
0% p.a. for 14 months
11.99% p.a.
$49 p.a.
Offers a $49 annual fee, up to $100 cashback when you make a purchase within 3 months and 0% p.a. for 14 months on balance transfers.
Citi Platinum Credit Card - 100k Bonus Points
0% p.a. for 15 months with 1% balance transfer fee
20.99% p.a.
$49 p.a. annual fee for the first year ($149 p.a. thereafter)
Earn 100,000 reward Points, enjoy a long-term balance transfer offer, a discounted first year annual fee and complimentary travel insurance.
BankSA Amplify Card
3% p.a. for 36 months
19.49% p.a.
$0 p.a. annual fee for the first year ($79 p.a. thereafter)
Receive a 3% p.a. for 36 months balance transfer and earn Qantas or Amplify Points per $1 spent. Plus, enjoy a $0 annual fee for the first year.
BankSA Vertigo Visa
0% p.a. for 18 months with 1% balance transfer fee
13.74% p.a.
$55 p.a.
Enjoy a 0% p.a. for 18 months balance transfer offer. Plus, up to 55 days interest-free on purchases.
St.George Vertigo Visa
0% p.a. for 18 months with 1% balance transfer fee
13.74% p.a.
$55 p.a.
Enjoy a 0% p.a. for 18 months balance transfer offer. Plus, up to 55 days interest-free on purchases.
Bank of Melbourne Vertigo Platinum
0% p.a. for 24 months with 1% balance transfer fee
12.74% p.a.
$99 p.a.
Offers a long-term balance transfer, low ongoing purchase rate, complimentary travel insurance and access to a 24/7 personal concierge service.
St.George Amplify Card
3% p.a. for 36 months
19.49% p.a.
$0 p.a. annual fee for the first year ($79 p.a. thereafter)
Take advantage of 3% p.a. interest on balance transfers for 36 months. Plus, a $0 first year annual fee and Amplify or Qantas Points per $1 spent.
NAB Low Rate Platinum Card
0% p.a. for 6 months with 2% balance transfer fee
0% p.a. for 9 months (reverts to 13.99% p.a.)
$100 p.a.
Enjoy a 0% p.a. interest rate offer on purchases for 9 months and the protection of 7 complimentary insurances including overseas travel insurance.
American Express Velocity Escape Card
0% p.a. for 12 months with 1% balance transfer fee
20.74% p.a.
$0 p.a.
Earn uncapped Velocity Points on purchases, pay $0 annual fee for life and take advantage of a 0% p.a. for 12 months balance transfer offer.
American Express Explorer Credit Card
0% p.a. for 12 months with 1% balance transfer fee
20.74% p.a.
$395 p.a.
Receive 50,000 bonus Membership Rewards points, a yearly $400 Travel Credit and 2 entries per year to the American Express Lounge.
Citi Rewards Platinum Credit Card
0% p.a. for 26 months with 2.5% balance transfer fee
20.99% p.a.
$49 p.a. annual fee for the first year ($149 p.a. thereafter)
Earn reward Points per $1 spent, take advantage of a 0% p.a. for 26 month balance transfer offer, plus complimentary international travel insurance.
Bank of Melbourne Amplify Card
3% p.a. for 36 months
19.49% p.a.
$0 p.a. annual fee for the first year ($79 p.a. thereafter)
Take advantage of a 3% p.a. for 36 months balance transfer offer, Amplify or Qantas points per $1 spent and enjoy a $0 annual fee for the first year.

Compare up to 4 providers

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Problem: Getting approved for only part of the balance transfer

When you apply for a balance transfer, issuers only allow you to transfer a certain percentage of the credit limit you are approved for on the new card. This often sits between 70% and 95% of the total credit limit. (Note: This is the maximum you can transfer, but you can also transfer a lower amount if you have less debt).

If you’re approved for a credit limit that doesn’t allow you to move the entire debt, the issuer may offer a partial balance transfer. In the scenario above, for example, if you were approved for a $5,000 credit limit, the new issuer might transfer $4,500 (90%) of your debt over and leave you with a $500 balance on your old card.

What to do about it

If you end up approved for a balance transfer card with a limit that’s too low to allow you to transfer the entire balance, you have two main options:

  • Cancel the application once the new issuer sends you details of the suggested account terms.
  • Pay off the remaining debt on the old card as soon as possible so you can focus on dealing with the rest of it at the lower promotional balance transfer rate offered on the new card.

*Remember: you should receive information on the new credit card once it is approved, giving you a chance to review the terms and conditions before accepting or declining the new card.

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Problem: Paying more fees than expected

Sometimes balance transfers come with additional costs that we forget about or don’t even realise exist until they show up on our statements, in particular these two:

  • Balance transfer fees. Some credit card companies charge a one-time processing fee for your balance transfer. This fee is usually a percentage of the total transferred, ranging from 1% to 4% depending on the credit card. To put this into perspective, let’s say you’re looking at a card with a 2.5% balance transfer fee. If you wanted to transfer $5,000, you’d have an extra $125 added to your debt.
  • Annual fees. If the new credit card has an annual fee, it could be charged when the account is first opened. Meanwhile, if you cancel your old card, you could also be charged one final annual fee, depending on the account terms and conditions. With these fees ranging from $30 to $300 or more, dealing with the extra cost could be very expensive.

What to do about it

  • Unfortunately, once you notice these charges it will be too late to avoid them completely. It might be a good idea to go over the terms and conditions of the account, just to be sure that they do mention these fees (if not, you might be able to dispute them). If there’s no cause for dispute, then the best thing to do is prioritise paying these charges off as quickly as possible – even if it means adjusting your budget a little in the process. At least then you can avoid or at least reduce the amount of interest that you pay for them and then get back to paying down your existing debt.
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Problem: Forgetting to make payments

This mistake often comes up with 0% balance transfer offers, which can sound like a great way to not pay down your debt for months. It’s important to remember that even if there is no interest applied to the balance, you will still have to pay at least the minimum required for each statement period. Otherwise, you could end up dealing with late payment fees and other penalties.

Payments to your old card

Applying for a balance transfer is only the beginning of the process when it comes to moving debt from one card to another. From there, you have to get approval and then wait for the new issuer to process the transfer, which typically takes up to 10 working days.

In the meantime, the balance on your old card will accrue interest as usual and you will still need to make any payments that are due so that you don’t end up with late payment fees or other penalties.

What to do about it

  • If you forget to make a payment on your old or new account, contact the relevant credit card issuer straight away. Explain that you have missed a payment and let them know when you plan on making it (or make it straight away and tell them).

Problem: Keeping your old credit card open

When you get a balance transfer credit card, it is your responsibility to decide what you do with the old credit card. That means if you want to cancel it, you will have to go through that process independent of the balance transfer.

If you don’t cancel the old credit card, there could be a temptation to use it to make purchases (and further grow your balance). It could also attract new interest charges and annual fees, and will also mean you have more payments to deal with every month.

What to do about it

You can cancel the old credit card account at any time with the following steps.

  1. Make sure there is no balance on the old card.
  2. Cancel any direct debits from the account (or transfer them to a different account).
  3. Transfer or redeem any rewards or frequent flyer points you've accumulated.
  4. Contact your old credit card company or go to their website and complete an account cancellation form.
  5. Check the account balance again – to make sure you've paid any closing charges.
  6. Request written confirmation from your old credit card company when the process is complete.
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Problem: Making new purchases on a balance transfer card

Any new purchases you make on a balance transfer credit card will be charged interest at the purchase rate, not the promotional balance transfer rate. Plus, you won’t be able to take advantage of any interest free days, which only apply when you have a zero balance.

As banks are forced to repay the balance that’s accruing the highest interest first, your purchases that collect the standard interest rate will be paid off before your transferred balance. Given the low or 0% balance transfer offer is only in place for a set number of months, it’s important to not waste that time paying off purchases so you can repay your balance before the offer ends.

What to do about it

  • If you have used your new card for purchases, make paying off these charges a priority. At the very least you should aim to increase your monthly repayment amount to factor in this new debt.

Carrying a balance when the introductory rate reverts

Whether the introductory interest rate on a balance transfer card lasts for four months or 24, eventually it will revert to the higher, standard rate of interest, usually the cash advance rate, and be charged on any remaining balance. You could go from paying 0% p.a. interest to 22% p.a. interest so it's in your best interest to pay the debt before the introductory rate expires.

What to do about it

  • If you’re one of the many people who end up with a remaining balance when the introductory rate reverts, the priority should be to pay of the debt as quickly as possible. This could mean adjusting your budget and making bigger monthly payments, or using savings or other lump sums of money to clear the balance.
  • Another option is to make weekly payments as soon as you get your salary – even though credit card interest is charged monthly, it’s actually calculated daily, so if you make more frequent payments you can reduce the overall amount of interest that you pay.
  • Depending on your circumstances and creditworthiness you could also consider a second balance transfer or a debt consolidation personal loan.

Balance transfers come with so much fine print that there is often confusion or a lack of awareness about exactly how they work – which can lead to lots of costly mistakes. Now you know how to deal with these kinds of issues, you can get past them and learn from them so that you avoid them altogether in the future.

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6 Responses

  1. Default Gravatar
    LorraineAugust 19, 2012

    What other options are there besides balance transfers to handle credit card debt if you can’t pay it off? Would it be a personal loan if you are unable to do a mortgage top up?

    • finder Customer Care
      JacobDecember 14, 2012Staff

      Hi Lorraine. Thanks for your question. We spoke to NAB about this very topic. Here’s a snippet from our conversation.



  2. Default Gravatar
    ShantellAugust 18, 2011

    I am looking at getting a balance transfer for my 2 store cards (overall limits $11,800.) I have 2x interest free purchases on those cards that I DO NOT want to balance transfer. Im not sure how to go about this.

    • finder Customer Care
      JacobMarch 28, 2013Staff

      Hi Shantell. You can transfer the balance from multiple store cards; however, I don;t believe it’s possible to select certain transactions to transfer. Perhaps speak to the bank about this. Sorry for the delay in the response.

  3. Default Gravatar
    VanJuly 28, 2011

    Hello, why do these articles not suggest the workaround solution on balance transfer traps: Once the low interest rate period on balance transfer is up, transfer the balance BACK over to your old card, and get a whole new period of low interest rates. Is there any information on this method, and how often it can be done?

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